UPDATE 2-Stifel Financial to buy Butler Wick for $12 mln

Fri Dec 19, 2008 11:13am EST

(Adds details, analyst comment, share movement)

By Sweta Singh

BANGALORE Dec 19 (Reuters) - Investment bank Stifel Financial Corp (SF.N) said it will buy financial advisory business firm Butler Wick & Co from United Community Financial Corp (UCFC.O) for $12 million as it seeks to strengthen its brokerage segment amid market turmoil.

Shares of Stifel Financial rose as much as 8 percent to $47.33 on the New York Stock Exchange. The shares have gained 25 percent in value since January.

With the deal, Stifel Financial meets its goal of expanding in the Ohio Valley Region, and further builds upon the firm's recent growth achieved through acquisitions, Chief Executive Ronald Kruszewski said.

Stifel Financial had acquired New Jersey-based brokerage Ryan, Beck & Co in February last year.

Fox-Pitt analyst David Trone expects the deal to boost Stifel Financial's earnings per share by at least 7 cents.

In an interview with Reuters in October, CEO Kruszewski had said the phenomenal turmoil of the past two years is expected to trigger changes in financial services regulation, with brokers in particular undergoing more regulatory scrutiny, creating more merger opportunities.

The credit crisis has wiped off investment banks from Wall Street and prompted regulators to look deeper into laws governing financial bodies in the United States.

Brokerage Stifel Nicolaus, the main unit of Stifel Financial Corp, has about 1,300 brokers. The firm has hired brokers from Wachovia Securities, which saw its parent Wachovia Corp WB.N struggle before agreeing to be acquired by Wells Fargo & Co (WFC.N).

Stifel Financial expects to close the latest deal during the fourth quarter.

The company's shares were trading up 6 percent at $46.60 Friday morning on the New York Stock Exchange. (Editing by Pratish Narayanan)

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